Last month, I found five quotes from Markel Corporation (NYSE:MKL) CEO Alan Kirshner that any long-term investor can appreciate. While Kirshner doesn’t spend much time in the spotlight, Markel has risen more than 5,900% under his leadership since going public in 1986.
Even so, it’s also safe to say Markel Corporation (NYSE:MKL) President and CIO Tom Gayner is another big reason the company is often compared to a mini-Berkshire Hathaway Inc. (NYSE:BRK.B). Of course, few people doubt Gayner knows what he’s doing considering he has helped the stock become an easy 21-bagger since he took the helm of Markel Corporation (NYSE:MKL)’s investment division in 1990.
With that, here are five key quotes from Gayner to give us a better idea of what it takes to be a successful long-term investor:
On knowing your limits
When asked last year whether he saw opportunities in underperforming large bank stocks, Gayner replied “There might well be, but I have decided that they’re beyond my circle of competence to invest in them.”
While his statement seems a bit surprising on the surface, Gayner effectively illustrates it’s perfectly acceptable to admit when certain investments are outside our core areas of expertise. I don’t know about you, but in today’s age of arrogance and over-inflated egos, I find his rare spark of humility downright refreshing.
“Things are always getting better or worse, and it’s no different this time.”
This echos one of my all-time favorite quotes from mutual fund pioneer John Templeton, who wrote “The four most dangerous words in investing are: ‘this time it’s different.’”
To be sure, investors tend to have a hard time remembering nothing goes up forever, only to react badly when inevitable wider market pullbacks occur.
Case in point? Since the Great Depression, the United States has endured 13 gut-wrenching recessions, each of which undoubtedly caused long-term investors to question whether their patience was merited. Sure enough, each time, the market bounced back stronger than before, and now the indexes currently sit at all-time highs — and have more than doubled from their 2009 lows.
Of course, this is the perfect segue into Gayner’s next words of wisdom…
On why value investing works
“There are certainly times when it goes out of favor, and that’s always been the case… and that’s why it works. If it were always easy, that’s what everyone would do. Part of being a value investor is being willing to lean against the wind and to do things that are unpopular.”
Sure enough, our most recent recession perfectly illustrated one of those times long-term value investing seemed to have gone out of favor, with market pundits too often regurgitating headlines like, “Value investing is dead!”
However, as fellow Fool Morgan Housel pointed out just a few days ago, one of the most valuable lessons investors can learn is that the market eventually, inevitably rewards those patient investors who “stick it out.”
On “forever” as a holding period
“In general, we hope to be able to buy a stock and never sell it. [...] I think that if you limit your buying to things you will be able to own for a long time, you will put more thought in to whether to buy it or not and that leads to better long-term decisions.”